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Practical system of Accounting-II : Special Purpose Subsidiary Books. PURCHASES BOOK.
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Practical system of Accounting-II : Special Purpose Subsidiary Books
PURCHASES BOOK This book is kept to record all credit purchases of goods for resale. To be eligible for being recorded in the purchase book ,the goods purchased on credit must be those in which the firm normally deals. Cash purchases of goods are entered in the CASH BOOK, so these are not recorded in PURCHASES BOOK. This book is also known as Invoice book. The ruling of the purchases book is as follows :
Sales Book In many businesses, a considerable proportion of sales will be made on credit rather than immediate cash. In fact the sales of some businesses will consist entirely of credit sales. For each credit sale, the selling firm will send a document to the buyer showing full details of the goods sold and the price of the goods. This document is known as an invoice and to the seller it is known as sales invoice. The specimen ruling of sales book is given below :
Purchase Return Book This book keeps the records of the returns outward, that is, return of goods bought. The person returning the goods sends a debit note to the supplier informing him that he is debiting the latter’s account with the amount of goods returned. This book is also known as returns outwards books. The specimen is given below :
Sales Return Book Sales return book, also known as return inward book, is kept for recording returns inwards, that is, returns of goods sold by us. The trader sends a credit note to the customer informing him that he has credited the latter’s account with the value of goods returned. The specimen is as follows :
Debit Note & Credit Note • A debit note is prepared when goods are returned by the purchaser due to some reason. Two copies of this note are prepared. The original copy is sent to the party to whom goods are return and the duplicate is kept in the office. • A credit note is like a debit note. It is sent by the seller to the purchaser for the goods returned by the latter to the former.
Journal Proper • Journal proper is used for recording only those transaction which can not be recorded in any of the other subsidiary books examples of such transaction are • Opening entries • Transfer Entries • Adjusting Entries • Closing Entries • Bad debts
Practical Problems • Question..From the following transaction prepare the sales return books of rajeshwari trading company: • 2002 Jan-1 Prabhaker and co. returned 50 bags of rice, the rate of which is rupees 550 per bag Jan-2 Raja and co. return 40 bags of sugar the rate of which is rupees 750 per bag Jan-10 Subhash and sons returned 10 tons of ground oil, the rate of which is rupees 600 per ton Jan-20 Ugandhar returned goods worth rupees 400
Question.. On Jan 1,2002 Moti’s assets were : Cash Rs.2000;due from Jeevan Rs.1,000; stock Rs.3,000; furniture Rs.5000; and he had to pay kishore RS.2,000. The following transactions took place : Jan. 2 Purchased furniture from Hanuman for Rs. 200. Jan. 5 Received payment from Jeevan, discount allowed being 2% 8 Sold to Mahendra 10 watches, sent invoice at Rs.300 per watch, allowed 10% trade dis. 12 Sent to Mahendra a credit note because price per watch was Rs. 250 and not Rs. 300 20 Settled kishore’s account to the extent of Rs. 1,000 only,he allowed 2.5% discount 25 Purchased from kishore goods of the list price of Rs. 1,500.He allowed 20% trade dis. 28 Paid the amount due to Hanuman. 31 Paid salaries Rs. 200 and rent Rs. 100. Prepare Moti’s subsiiary books and balance these books on 31st Jan. ,2002.
